A nonprofit that received the largest grant ever awarded by the Texas cancer-fighting agency said Tuesday it has shut down with its work barely begun.

The Statewide Clinical Trials Network of Texas, which received a $25.2 million grant from the Cancer Prevention and Research Institute of Texas in 2010, figured prominently as an example of mishandled funds and conflicts of interest in a state audit released Monday.

The critical audit of the cancer agency reported the clinical trials network had received $7 million so far. But in an interview with the Houston Chronicle the network's president, Dr. Charles Geyer, said it had consumed nearly $10 million.

"It was really almost setting up a clinical trials factory," Geyer said. "Developing and managing clinical trials, particularly across a lot of institutions, takes a lot of work and resources."

30 staffers fired

Late on Monday, 30 staff members were terminated, and six will remain on a temporary basis to shut the network down. Geyer said it's unlikely the network's mission can be salvaged despite the funds spent and the two-plus years of groundwork.

"My own opinion is that it would be very difficult to reconstitute it," Geyer said of the clinical trials network. "It's certainly not impossible. It would take unprecedented coalescence of the Legislature and a lot of people for that to happen. We're all hopeful, but I'm not real optimistic that would happen."

The network was established to make clinical trials more available at institutions across the state.

"Under this plan, investigational cancer studies no longer would have been limited to people who live near the state's academic health centers," said Dr. William Butler, chairman of the clinical trials network and chancellor emeritus of Baylor College of Medicine. "(This) was the best chance many of the state's cancer patients had to receive what are often the only treatments that offer them hope."

However, a review by State Auditor John Keel found that the cancer agency violated several rules in making the grant, including improperly advancing the money to the clinical trials network and failing to monitor how the funds were spent.

Bonuses, conflicts

Among costs the audit called "unallowable" was $300,000 for bonuses, travel, decorations and furniture. The audit also cited conflicts of interest involving key officials at the cancer agency and the clinical trials network.

The cancer agency's chief scientific officer, Dr. Alfred Gilman, and chief executive, Bill Gimson, also served on the board of directors for the clinical trials network. And the network's "receiving agent" was Carolyn Bacon Dickson, the executive director of the O'Donnell Foundation. The same foundation, tied to Dallas philanthropist Peter O'Donnell, has given $1.6 million to a foundation that supplements salaries of top cancer agency officials.

Asked about Dickson's involvement, Geyer said, "It's very unfortunate that there's a suggestion she was doing something (wrong)."

As a charity, the clinical trials network was required to file tax forms known as 990s. This tax form for 2011 shows salary expenditures of $809,000, or about 60 percent of the organization's revenues. Another $120,000 was spent on legal expenses, $65,000 on travel and $60,000 on office costs.

During speeches, Geyer touted a portfolio of seven cancer trials the network helped develop to make experimental drugs more widely available to Texas patients. It's unclear, though, whether a single patient had been enrolled.

Last October the network issued a news release announcing the beginning of a study of G-202, an experimental drug for the treatment of liver cancer. The study was the first of its kind, the release said, and "will launch" the organization's portfolio of clinical trials.

Legislators are considering multiple strategies for the cancer agency, from ending its guaranteed funding to more moderate reforms. Criminal and civil investigations of the agency are under way, and much of its senior leadership has stepped down.